STORES Magazine - July 2015 - 74


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END CAP

Doing Business in the Gulf:
Hints and Tips from Carrefour
by GILDAS AITAMER
Gildas Aitamer is a retail analyst with Planet Retail.

Given the relatively restrained consumption levels in Europe, a number of suppliers
are turning to new regions.
The Middle East is slowly emerging as one hotspot, and
Carrefour's Majid Al Futtaim, the largest grocery retailer in
the Middle East and North Africa, is a company to watch.
St├ęphane Joly, vice president of marketing and sourcing at
Carrefour MAF in the Persian Gulf, accepted Planet Retail's
invitation to share his insights and advice to manufacturers
looking to develop in the markets of the Gulf Co-operation
Council, a political and economic alliance of six Middle
Eastern countries: Saudi Arabia, Kuwait, the United Arab
Emirates, Qatar, Bahrain and Oman.
The temptation to treat
the Gulf countries as one
entity is considerable. Is
that justified?

It is true that GCC is
relatively homogeneous
economically, but we are operating in a vast region. We
cannot put a regional giant
such as Saudi Arabia in the
same basket as a small country such as Bahrain. We see
extremely varied differences
in term of consumption.
This seems to translate to the formats Carrefour
operates in each country, doesn't it?

Carrefour has always entered countries with hypermarkets first to build critical size, which allows us to negotiate
advantageous contracts with suppliers ... . That is why the
UAE, with its five different formats, stands out in the region.
In addition to the existing hypermarkets, supermarkets and
non-food e-commerce, we recently launched City neighborhood stores; in the months to come, we will introduce
grocery e-commerce.
What strikes us about Carrefour UAE is the sheer
breadth of the assortment. How do you overcome
the challenges this brings?

In the UAE population, we have over 250 nationalities,
each with their own habits and product preferences. To
take a basic example, in our store we list no less than nine
74

STORES July 2015

different types of cherry tomatoes alone. Each store assortment is tailored to its particular catchment area, thanks to
data leveraged from our loyalty card. We then, of course,
benchmark ourselves against competitors in each area and
adjust accordingly, in terms of references and pricing.
The UAE is heavily reliant on imports. How are you
impacted by international policies and currency
fluctuations?

The UAE is a major tourist destination, and the fall of the
ruble and the euro deterred
many from travelling to the
Gulf or spending in-store
if they did. This also had a
knock-on effect with many
expats hoarding money to
be transferred back to their
home countries.
Regarding our buying
conditions, it very much
depends on the exchange
rate mechanism stipulated in
the contracts. The impact is
marginal as the majority of
our imports come from Asia
where contracts are made in
[U.S. dollars] - to which the UAE currency is pegged. ...
As for regional politics ...when markets are hermetically
sealed, such as in Iran for consumer electronics, it has a
negative impact on our business.
Does this extensive reliance on imports imply
difficulties in local sourcing?

Some enormous regional manufacturers like Almarai from
Saudi Arabia could certainly provide substitutes for our imports, but these will not necessarily be valued by our clients
in term of quality versus "A" brands. We also work with
Turkish suppliers as their local produce is, in many cases,
suitable for the rest of the Arabic world.
That said, we rarely work with the manufacturer directly,
but mostly with importers, especially at the beginning of
a relationship when we need to ensure products will sell
before increasing quantities.
NRF.COM/STORES


http://www.NRF.COM/STORES

Table of Contents for the Digital Edition of STORES Magazine - July 2015

Top 100 Retailers
Retail People
No Flash in the Pan
Lost and Found
C2W
Editor's Page
President's Page
Retail Politics
NRF News
POV
NRF Communities Update
End Cap
Trends
Online
Technology
Human Resources
Social Media
Merchandising
Software
Finance
Marketing
Personnel
Operations
STORES Magazine - July 2015 - Cover1
STORES Magazine - July 2015 - Cover2
STORES Magazine - July 2015 - 3
STORES Magazine - July 2015 - 4
STORES Magazine - July 2015 - 5
STORES Magazine - July 2015 - Editor's Page
STORES Magazine - July 2015 - 7
STORES Magazine - July 2015 - President's Page
STORES Magazine - July 2015 - 9
STORES Magazine - July 2015 - Retail Politics
STORES Magazine - July 2015 - 11
STORES Magazine - July 2015 - NRF News
STORES Magazine - July 2015 - Trends
STORES Magazine - July 2015 - 14
STORES Magazine - July 2015 - 15
STORES Magazine - July 2015 - 16
STORES Magazine - July 2015 - 17
STORES Magazine - July 2015 - 18
STORES Magazine - July 2015 - Top 100 Retailers
STORES Magazine - July 2015 - S2
STORES Magazine - July 2015 - S3
STORES Magazine - July 2015 - S4
STORES Magazine - July 2015 - S5
STORES Magazine - July 2015 - S6
STORES Magazine - July 2015 - S7
STORES Magazine - July 2015 - S8
STORES Magazine - July 2015 - S9
STORES Magazine - July 2015 - S10
STORES Magazine - July 2015 - S11
STORES Magazine - July 2015 - S12
STORES Magazine - July 2015 - S13
STORES Magazine - July 2015 - S14
STORES Magazine - July 2015 - S15
STORES Magazine - July 2015 - S16
STORES Magazine - July 2015 - Retail People
STORES Magazine - July 2015 - 36
STORES Magazine - July 2015 - 37
STORES Magazine - July 2015 - No Flash in the Pan
STORES Magazine - July 2015 - 39
STORES Magazine - July 2015 - 40
STORES Magazine - July 2015 - Lost and Found
STORES Magazine - July 2015 - 42
STORES Magazine - July 2015 - 43
STORES Magazine - July 2015 - C2W
STORES Magazine - July 2015 - Online
STORES Magazine - July 2015 - 46
STORES Magazine - July 2015 - 47
STORES Magazine - July 2015 - Technology
STORES Magazine - July 2015 - 49
STORES Magazine - July 2015 - Human Resources
STORES Magazine - July 2015 - 51
STORES Magazine - July 2015 - Social Media
STORES Magazine - July 2015 - 53
STORES Magazine - July 2015 - Merchandising
STORES Magazine - July 2015 - 55
STORES Magazine - July 2015 - Software
STORES Magazine - July 2015 - 57
STORES Magazine - July 2015 - Finance
STORES Magazine - July 2015 - 59
STORES Magazine - July 2015 - Marketing
STORES Magazine - July 2015 - 61
STORES Magazine - July 2015 - Personnel
STORES Magazine - July 2015 - 63
STORES Magazine - July 2015 - 64
STORES Magazine - July 2015 - 65
STORES Magazine - July 2015 - Operations
STORES Magazine - July 2015 - 67
STORES Magazine - July 2015 - 68
STORES Magazine - July 2015 - 69
STORES Magazine - July 2015 - 70
STORES Magazine - July 2015 - 71
STORES Magazine - July 2015 - POV
STORES Magazine - July 2015 - NRF Communities Update
STORES Magazine - July 2015 - End Cap
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STORES Magazine - July 2015 - Cover4
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